By Richard Stobbe
Xylem Water Solutions is the owner of the registered Canadian trademark AQUAVIEW in association with software for water treatment plants and pump stations. Xylem received a Section 45 notice from a trademark lawyer, probably on behalf of an anonymous competitor of Xylem, or an anonymous party who wanted to claim the mark AQUAVIEW for themselves. This is a common tactic to challenge, and perhaps knock-out, a competitor’s mark.
A Section 45 notice under the Trade-marks Act requires the owner of a registered trademark to prove that the mark has been used in Canada during the three-year period immediately before the notice date. As readers of ipblog.ca will know, the term “use” has a special meaning in trademark law. In this case, Xylem was put to the task of showing “use” of the mark AQUAVIEW in association with software.
How does a software vendor show “use” of a trademark on software in Canada?
The Act tells us that “A trade-mark is deemed to be used in association with goods if, at the time of the transfer of the property in or possession of the goods, in the normal course of trade, it is marked on the goods themselves or on the packages in which they are distributed…” (Section 4)
The general rule is that a trademark should be displayed at the point of sale (See: our earlier post on Scott Paper v. Georgia Pacific). In that case, involving a toilet paper trademark, Georgia-Pacific’s mark had not developed any reputation since it was not visible until after the packaging was opened. As we noted in our earlier post, if a mark is not visible at the point of purchase, it can’t function as a trade-mark, regardless of how many times consumers saw the mark after they opened the packaging to use the product.
The decision in Ashenmil v Xylem Water Solutions AB, 2016 TMOB 155 (CanLII), tackles this problem as it relates to software sales. In some ways, Xylem faced a similar problem to the one which faced Georgia-Pacific. The evidence showed that the AQUAVIEW mark was displayed on website screenshots, technical specifications, and screenshots from the software.
The decision frames the problem this way: “…even if the Mark did appear onscreen during operation of the software, it would have been seen by the user only after the purchaser had acquired the software. … seeing a mark displayed, when the software is operating without proof of the mark having been used at the time of the transfer of possession of the ware, is not use of the mark” as required by the Act.
The decision ultimately accepted this evidence of use and upheld the registration of the AQUAVIEW mark. It’s worth noting the following take-aways from the decision:
- The display of a mark within the actual software would be viewed by customers only after transfer of the software. This kind of display might constitute use of the mark in cases where a customer renews its license, but is unlikely to suffice as evidence of use for new customers.
- In this case, the software was “complicated” software for water treatment plants. The owner sold only four licenses in Canada within a three-year period. In light of this, it was reasonable to infer that purchasers would take their time in making a decision and would have reviewed the technical documentation prior to purchase. Thus, the display of the mark on technical documentation was accepted as “use” prior to the purchase. This would not be the case for, say, a 99¢ mobile app or off-the-shelf consumer software where technical documentation is unlikely to be reviewed prior to purchase.
- Website screenshots and digital marketing brochures which clearly display the mark can bolster the evidence of use. Again, depending on the software, purchasers can be expected to review such materials prior to purchase.
- Software companies are well advised to ensure that their marks are clearly displayed on materials that the purchaser sees prior to purchase, which will differ depending on the type of software. The display of a mark on software screenshots is not discouraged; but it should not be the only evidence of use. If software is downloadable, then the mark should be clearly displayed to the purchaser at the point of checkout.
- The cases have shown some flexibility to determine each case on its facts, but don’t rely on the mercy of the court: software vendors should ensure that they have strong evidence of actual use of the mark prior to purchase. Clear evidence may even prevent a section 45 challenge in the first place.
To discuss protection for your software and trademarks, contact us.
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